Principles required by statute which must be followed by an insurance company when submitting its financial statements to the various state insurance departments. Such principles differ from the Generally Accepted Accounting Principles (GAAP).
Rules of financial computation and presentation required by statute which must be followed by an insurance company when submitting its financial statements to state insurance departments. Such principles differ from Generally Accepted Accounting Principles (GAAP).
The set of accounting principles upon which an insurance company's annual statement is required to be based for presentations to state regulatory authorities. Unlike Generally Accepted Accounting Principles (GAAP), SAP is based on a liquidation concept which assumes that the company could be forced to terminate its business operations immediately, at any given time, and therefore views the value of the company's assets in liquidation versus its debt.
General] accounting standards used in preparation of financial reports required by state regulatory authorities; distinguished from GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Statutorily mandated accounting principles and practices that must be followed when an insurance company submits its annual financial statement to the department of insurance. In contrast to Generally Accepted Accounting Principles (GAAP) which are followed by most other businesses.
See statutory accounting practices (SAP).
The Statutory Accounting Principles are a set of accounting rules for insurance companies set forth by the National Association of Insurance Commissioners. They are used to prepare the statutory financial statements of insurance companies. With minor state-by-state variations, they are the basis for state regulation of insurance company solvency throughout the United States.